KARACHI, May 15: The government has again rejected the demand of the ghee and cooking oil manufacturers for reduction in import duty on palm olien and slashing of other taxes to provide relief to consumers.
Senior office-bearers of Pakistan Vanaspati Manufacturers Association (PVMA) on May 8 held a meeting with Adviser to the Prime Minister on Finance Dr Salman Shah and reiterated their demand for rationalisation of import duty structure on palm olein and reducing of sales tax to five per cent, but the adviser did not respond in affirmative.
PVMA chairman Shaikh Amjad Rasheed said that the adviser was of the view that the government would face revenue constraint if import duty was reduced.
He said instead giving direct relief to the consumers, Dr Salman however hinted at providing more subsidies on the recently introduced government’s ghee and cooking oil which is being offered at utility stores across the country.
The PVMA chief said that the Utility Stores Corporation with few hundred outlets could not meet the entire demand as majority of consumers were buying ghee and cooking oil from the retail shops.
He pointed out that the prices of palm olien in world markets had been hovering around record highs for the last few months and cut in import duty could be only way to provide relief to the local consumers.
He said that owing to rising prices the sales of 16-kg ghee and cooking oil tins had plunged by 30-40pc in the last few months.
“Still the government collects Rs22 per kg/litre on ghee and cooking oil in the shape of duties and taxes which is not fair as the local consumers have been feeling the pinch of rising prices,” he pointed out.
He disclosed that a team of Central of Board of Revenue (CBR) had recently visited Peshawar to ascertain the quantum of ghee and cooking oil export to Afghanistan and observed that following entry of Indonesian and Malaysian brands in Kabul, the export from the NWFP had suffered a fall of about 40 per cent during the last few months.
PVMA Senior Vice-Chairman Abdul Waheed told Dawn from Lahore that the association had urged the government to reduce sales tax to five per cent from 15 per cent so that consumers could get a price benefit of Rs7 per kg at retail level.
He suggested to the government, which is collecting Rs9,050 per ton on palm olien, that the duty should be reduced as the international prices of the commodity in Malaysia and Indonesia were hovering at record peak. “However, when international rates fall drastically, the import duty can be raised to lessen the hit on national kitty in terms of revenues,” he added.
He said that the price of 16-kg ghee tin had risen to Rs1,240-1,250 as compared to Rs900 three months back owing to persistent increase in palm olein prices.
On Tuesday, palm olien rate was quoted at $802 per ton as compared to $620 per ton in March 2007 and $450 per ton in July 2006.
